Asian stocks rose on Thursday after major US technology companies announced plans to increase capital spending, a move expected to support chipmakers in the region, while the escalating war in the Middle East pushed oil prices to their highest in more than six weeks.

In contrast, rising oil prices revived inflation concerns, pushing short-term US Treasury yields to their highest in 17 weeks amid bets that the Federal Reserve may have to raise interest rates sooner than expected.

Brent crude rose about 2 percent to around $96 a barrel after the US launched a new wave of strikes on Iran, while Houthis targeted oil tankers in the Red Sea, an escalation that heightened fears of disruption to global energy supplies.

Thierry Wizman, senior currency and interest rate strategist at Macquarie Group, said rising oil prices revived concerns about their impact on global economic growth.

He added that the nearly five-month-old war had drained global inventories and fueled inflation, warning that the simultaneous closure of the Strait of Hormuz and Bab el-Mandeb would disrupt transit routes for more than a quarter of the world's oil and gas supplies.

Chip stocks lead gains

The earnings results of Alphabet and Tesla boosted sentiment, as they showed continued strong spending on artificial intelligence infrastructure, with Alphabet raising its capital expenditure plan this year to between $195 and $205 billion.

A large portion of this spending is expected to benefit chipmakers in Asia, which drove South Korea's KOSPI up more than 3 percent led by shares of SK Hynix and Samsung Electronics, while Japan's Nikkei rose about 1 percent.

The MSCI Asia-Pacific index, excluding Japan, also rose about 1 percent, heading for weekly gains of nearly 3 percent, ending a two-week losing streak.

Gary Tan, portfolio manager at Allspring Global Investments, said strong growth in cloud computing services confirms the continuation of the AI spending cycle, boosting the prospects of Asian chip companies.

He added that AI is rapidly moving from the infrastructure-building phase to reshaping competition in sectors such as search engines and e-commerce, supporting continued investment in the sector.

In contrast, markets are still awaiting whether the massive spending on AI will translate into strong profit growth, and whether the high valuations of technology stocks are justified.

Nick Twidale, senior market strategist at ATFX Global, said investors remain cautious, balancing the impact of positive corporate results with the escalating conflict in the Middle East.

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